The Isle of Man has become the second nation to ratify a multilateral tax treaty designed to prevent tax avoidance by multinational firms.
The Isle of Man follows Austria, depositing its instrument of ratification of Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) with the OECD on October 25,
The MLI is designed to implement agreements reached in 2015 OECD/G20 base erosion and profit shifting (BEPS) project. Included are measures to prevent tax treaty shopping and hybrid mismatches and measures strengthening the definition of permanent establishment. The MLI also contains provisions designed to improve the resolution of cross-border tax disputes.
“The Isle of Man takes a proactive approach to work with the international community on tax avoidance and has demonstrated this by becoming just the second country to ratify the new OECD treaty. Furthermore, we will continue to take our international responsibilities extremely seriously and in that respect the Isle of Man is not a jurisdiction that welcomes those seeking to evade or aggressively avoid taxes,” said Treasury Minister, Alfred Cannan MHK.
The MLI will enter into force three months after five countries ratify it.